MCDOWELL HOLDINGS LIMITED

Date: 09-05-2019

The Manager The Asst. Vice President

Dept. of Corporate Services Listing DepartmentBSE Limited National Stock Exchange of India Ltd.

Phiroze Jeejeebhoy Tower Exchange Plaza, C-1, Block — G

Dalal Street, Mumbai—400001 Bandra—Kurla Complex, Bandra (East)Mumbai-400051

BSE Scrip Code2532852 NSE Symbol: MCDHOLDING

Sub: Audited Financial Statements of the Company for the Quarter/year ended 31st

March, 2019 and outcome of the Board Meeting.

Dear Sir,

Pursuant to the provisions under Regulation 33 of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015, the Board of Directors of the Company at its meeting held

today have approved the Audited Financial Statements of the Company together with notes to

the financial statement for the quarter/year ended Bist March, 2019 and took on record the

Auditor’s Report of the Statutory Auditors there on.

Time of commencement of Board Meeting: 2:30 PM

Time of conclusion of the Board Meeting: 4: 00 PM

A copy of Audited Financial Statements of the Company for the quarter/year ended 3‘lst March,

2019 together with notes on financial statement and Auditor's Report of the Statutory Auditors

thereon are enclosed herewith.

The above is for your information and record.

Thanking You

Yours Faithfully

For McDowell Holdings Limited

Manoj Kumar

DGM-Legal & Company Secretary

Encl: as above

Registered Office : UB Tower, Level 12, US City, 24, Vittal Mallya Road, Bangalore 560001, India

Tel.: +91 80 3985 6500, Fax: +91 80 2227 4890, www.mcdowellholdings.co.in

Corporate Identity Number - L05190KA2004PLC033485 a n o u p

B V C & C0Head Office : No, 371, tst Floor, 8th Main Road,

- Sadashivanagar. Bangalore - 560 080

Chartered Accountants Ph- 1 080 - 23512855 ”356

Branch Office I tst Floor, Akashganga Complex. Near

E-mail : info@bvcglobal.com Karavali Junction NH—66, Udupi-576103Web : www.bvcg|oba|.corn Ph, : 0820—2526563

INDEPENDENT AUDITOR’S REPORT

(Pursuant to Regulation 33 ot‘the SEBI (Listing Obligations and Disclosure Requirements)

Regulations. 2015)

To

The Board 01‘ Directors ot‘

MCDOWELL HOLDINGS LIMITED.

1. We have audited the Statement of Financial Results (‘the Statement’) ol‘ MCDOWELL

HOLDINGS LIMITED (‘the Company’)for the year ended 31Sl March, 2019, attached

herewith. being submitted by the Company pursuant to the requirements of Regulation 33 ol'

the SE13] (Listing Obligations and Disclosure Requirements) Regulations. 2015. Attention is

drawn to the fact that the figures for the quarter ended 3|Sl March, 2019 and the

corresponding quarter ended in the previous year as reported in the Statement are the

balancing figures between audited figures in respect of the full financial year and the

published year~to~date figures up to the end ot‘the third quarter ol‘thc relevant financial year.

Also, the figures up to the end ol'the third quarter had only been reviewed and not subjected

to audit,

'l'his Statement has been prepared by the Company on the basis 01' the financial statements

and reviewed quarterly financial results tip to the end 01‘ the third quarter. which is the

responsibility ol‘ the Company‘s Management and approved by the Board ol‘ Directors ot‘the

Company. Our responsibility is to express an opinion on this Statement based on our audit of

the financial statements, which have been prepared in ceordance with the recognition and

measurement principles laid down in Accounting Standards specified under Section 133 of

the Companies Act, 2013 read with Rule 7 ol‘ the Companies (Accounts) Rules. 20l4 and

other accounting principles generally accepted in India and in compliance with Regulation 33

ot‘Sl’iBl (Listing Obligations and Disclosure Requirements) Regulations. 2015,

2. We conducted our audit in accordance with the auditing standards generally accepted in

India. Those Standards require that we plan and perl'orm the audit to obtain reasonable

assurance about whether the financial results are free from material misstatement. An audit

includes examining, on a test basis, evidence supporting the amounts disclosed as financial

results. An audit alsoineludes assessing the accounting principles used and significant

estimates made by the management. We believe that our audit provides a reasonable basis for

our qualified opinion.

Basis/Or qqui/icd opinion$1..

(1. The Company's income xiruams are no! snfficicn/ Io mee/ i/s recurring financial

obliga/ions The Company has defaulted in repaying [lie i17ter~c01790/‘ule deposits taken

by i/. 777exefaclors have Clt/VL’I'SL‘I)’ trifle/ed [/78 going’ concern umninplions l/.\'U£/ in Int

p/‘eporu/ion o/i/inum'iu/ Mule/news. (lonelier. _/or [/76 reasons .t‘lu/eci in nolc no. lo. (/76

Company con/mum Io prepare fly/incint'ia/ s/u/emenl.s' on going concern basis.

Head Office 2 No. 371, lst Floor, 8th Main Road,

B V C & CO- Sadashivanagar. Bangalore — 560 080

Chartered Accountants Ph. : 080 — 23612855 / 2856

Branch Office I tst Floor. Akashganga Complete Near

E-mail : info@bvcg|obal.com Karavali Junction NH-66, Udupi-576103Web : www.bvcgloba|.com Ph. : 0820-2526563

l). Uni/eel Breweries (Ho/clings) Limited, (UBHL) in which the company holds 52,60,002shares with a Carrying value 0/10. 49 crores has been orclerea’ to be wound up pursuantto an order dated ()7—{}2~2()l 7

o/ the Honourable High ("m/rt of'lQ/rncltaka. The decline.

other than temporary. in the value of'xuch investments as a result oft/11's development hm

not been quantified and provider/for in the accounts (re/er Note No. 3)

4, In our opinion and to the best ol‘our in Formation and according to the explanations given to

us. these financial results:

(a) are presented in accordance with the requirements of Regulation 33 01' the SEBI (ListingObligation and Disclosure Requirements) Regulations. 2015 in this regards

(b) except/or the effects of the matter described in the paragraph 3 above, give a true andlair view of the net loss and other financial information for the year ended 31“ March2019.

5. Further as mentioned above, we report that the figures for the quarter ended March 31. 2019

represents the derived figures between the audited figures in respect 01' financial year endedMarch 31. 201‘) and the published year—to—dale figures up to December 31, 2018 being thedate ol‘ the end ol‘ the third quarter 01‘ the current financial year, which were subjected to

limited review as stated in paragraph | above as required under Regulation 33 01' the SEBI

(Listing Obligations and Disclosure Requirements) Regulations, 2015.

Place: Bangalore For B V C & Co.,Date : 09~05—201 9 Chartered Accountants,

Firm Reg. No.: 0081548

CA Vishwas Shetty T

Partner

Membership No.2 1 8619

McDowell Holdings Limited

Regd. Office: US Tower, Level 12, US City, 24 Vittal Mallya Road, Bangalore— 560 001

Email: mhlinvestor©ubma|Lcum | website: WWW.mcdowellholdings.ca.in | CIN : L05190KA2004PLC033485

PART 1 Rs. Lakhs (except Per share data)

Statement of Audited Financial Results for the Quarter and Year Ended March 31, 2019

Three months ended Year ended Year ended

PARTICULARS 31‘03-2019 31-12-2018 31-03-2013 31-03-2015 31‘03-2018

Unaudited Unaudited Unaudited Audited Audited

1. Income from Operations

Dividend IncomeA 149.29 - 149.29 100.69

2. other Income 7.58 0.31 2.08 7.89 3.27

Total income from operations 7.58 149.60 2.08 157.13 103.96

3. Expenses

(a) Employee benefils expense 100.09 70.16 14.59 196.18 60.68

(b) Finance Costs 1.47 1.50 - 2.97 89.75

(c) Other expenses 504.63 74.53 21.45 623.94 11408

(d) Depreciation 0.05 0.05 0.07 0.1.8 0.29

Total expenses 606.24 146.24 36.10 823.27 164.80

4. Profit /(Lass) before exceptional item & tax (598.66) 3.36 (34.02) (666.09) (160.84)

5. Exceptional items :

3. Profit on sale of Investments 625.71 336.10 - 971.75 <

6. Profit / (Loss) before tax 27.05 339.46 (34.02) 305.66 (160.84)

7. Tax expense 5.00 - (0.10) 5.00 (0.10)

8. Profit / (Ldss) for the period / year 22.05 339.46 (33.93) 300.66 (160.74)

9. Paid‘up equity share capital 1,399.23 1,399.23 1,399.23 1,399.23 1,399.23

(face value of‘

10/- each, fully paid up)

10. Reserve excluding Revaluation Reserves as

per balance sheet of previous accounting year< - -

-

11. Earnings per share

(face value of ‘10/— each) (not annualised)

(a) Basic E1 diluted (before exceptional item) (4.28) 0.02 (0.24) (4.76) (1.15)

(in) Basic 3t diluted (afler exceptional item) 0.16 2.43 (0.24) 2.15 (1.15)

McDowell Holdings Limited

Regd. Office: UB Tower, Level 12, U8 City, 24 Vittai Mallya Road, Bangalore~ 560 001

Email: mhlinvestor@ubmail.com | website: www.mcdowellholdings.co.in | CIN : L05190KA2004PLC033485

STANDALONE STATEMENT OF ASSETS AND LIABILITIES

Rs. Lakhs

As at March 31, As at March 31,

PARTICULARS 2019 2018

Audited Audited

I. Equity and Liabilities

1. Shareholders' Funds

a. Share Capital 1,399.23 1,399.23

b. Reserves and Surplus (174173) (480.40)

2. Current Liabilities

a. Short-term borrowings 2,070.00 2,000.00

Trade Payables~

b. Other Current Liabilities 358.38 347.73

Short—term provisions— —

c. Short term provision 142.06 147.06

3,794.93 3,413.62

II. Assets

1. Non-current Assets

3. Tangible assets 0.44 0.54

b. Non Current Investments 2,913.23 3,083.47

2. Current Assets

a. Trade Receivables . —

b. Cash and Cash Equivalents 417.99 30.63

c. Short term Loans and Advances 207.03 183.26

d. Other Current Assets 256.24 115.72

3,794.93 3,413.62

McDowell Holdings Limited

NOTES

1. The accompanying Statement of Audited Financial Results for the year ended on 315‘

March 2019 have been reviewed and recommended by the Audit Committee and

thereafter approved and taken on record by the Board of Directors at their meeting held

on 9‘h May 2019 and has been audited by the Statutory Auditor of the Company.

2. Two investee companies being United Breweries Limited and United Breweries

(Holdings) Ltd (hereinafter referred to UBL and UBHL respectively) in which the

Company holds strategic investments have received orders in May 2016 from

Enforcement Directorate (hereinafter referred to as ED) directing them not to allow the

Company to sell / alienate / create third party mortgage rights in any manner on the shares

of such investee companies. These investee companies have written to NSDL and CDSL

through their Registrar and Transfer Agent to implement the directives of ED. The

Company is in the process of taking appropriate steps in consultation with the lawyers.

3. The Hon’ble High Court of Kamataka on 7%.? February, 2017 had passed an order of

winding-up on a Promoter Company being UBHL, in which the Company also holds

52,60,002 equity shares. The impact of the winding up order on the shareholding in this

Promoter Company is being assessed, pending the appeal filed in the Hon’ble High Court

of Karnataka by the Promoter Company.

4. The Company’s investments include 45,51,000 shares in UBL which were pledged in

favour of erstwhile lenders. As on date no dues are outstanding to these lenders but the

pledge on these shares have not been released pursuant to the directions of ED. The

Company is in the process of taking appropriate steps in consultation with the lawyers.

5. Further, 1,22,667 shares of UBL, being the balance pledged shares, consequent to

invocation by the erstwhile lenders and after liquidation of their dues, are lying in the

demat accounts of the said lenders. The Company understands that pursuant to the

directions of ED, these shares, dividend thereon and the excess sum recovered by them

6.

10.

The Company’s investment of 16,71,344 shares in United Breweries Limited has been

unilaterally transferred from the demat account of the Company to the demat account of

the Deputy Director, Enforcement Directorate, Mumbai on 3rd May, 2018. As per the

statutory requirements the Company has intimated the Stock Exchange. The Company is

in the process of taking appropriate steps in consultation with the lawyers.

The Company’s investments include 57,219 shares in Mangalore Chemicals and

Fertilizers Limited (hereinafter referred to as MCF) which were frozen by the Stock

Holding Corporation of India Ltd under an instruction from the Stock Exchanges, where

the shares of the Company are listed. The Company has filed an appeal before the

Securities Appellate Tribunal, Mumbai (SAT) and is pending adjudication.

I

The Company had dues of Rs. 23.24 crores (includes interest of Rs. 3.24 crores and

principal ICD of Rs. 20 crores) as on 30th June, 2017 to Zuari Fertilisers & Chemicals

Limited (hereinafter referred to as ZFCL). The Company had sought adjustment of Rs.

9.39 crores (shown as contingent dues from MCF, a subsidiary of ZFCL) against the

above dues. ZFCL has also filed a petition in NCLT (refer note no.9). In View of the

pendency of this NCLT matter and the fact that the Company has sought adjustment of

Rs. 9.39 crores, the interest on the ICD (refer note 11 as well) shall be accounted on the

basis of the outcome of the said NCLT matter.

ZFCL has filed a Company Petition before the National Company Law Tribunal (NCLT),

Bangalore, inter alia against McDowell Holdings Limited u/s 241, 242, 244, 246 and

other provisions of Companies Act, 2013, alleging mismanagement of the affairs of

Mangalore Chemicals & Fertilizers Ltd. (MCF) and seeking certain reliefs in the form of

disinvestment of UB Group’s holding in MCF in their favour, and making good the

purported losses arising on account of the alleged mismanagement of the affairs of MCF.

The matter is pending before NCLT, Bangalore.

The Company is one of the Claimants in an Arbitration matter against Zuari Fertilisers &

Chemicals Limited (ZFCL) and Zuari Agro Chemicals Ltd (ZACL), the respondents. The

arbitration proceedings have been concluded and vide the Arbitration Award dated 8th

May 2017, the Arbitrator has dismissed the Company’s claims ,andirasolggred all the

claimants to pay to the respondents a total sum of Rs. 75 lakhs."

11.

12.

The appeal filed by the Company against the Arbitration award before the Hon’ble High

Court, Bombay is pending and thus the said amount is treated as contingent in nature.

ZACL has filed an application in November 2018, initiating Corporate Insolvency

Resolution Process {under Section 7 0f the Insolvency and Bankruptcy Code, 2016 read

with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority)

Rules, 2016} against the Company seeking Company’s insolvency on the premise that the

dues of Rs. 17.87 crores remains unpaid (refer note no. 8 as well). The principal ICD was

of Rs. 20 crores and in the said application, ZACL has stated an adjustment of Rs. 9.39

crores (being the dues receivable by the Company from MCF, a subsidiary of ZACL).

Post such adjustment ZACL is now claiming an amount of Rs. 17.87 crores. The matter

is pending before NCLT.

ZACL also filed a suit in the Hon’ble City Civil Court in Bangalore against the Company

in December 2018, primarily regarding the pending dues of Rs. 17.87 crores (refer note

nos. 8 and 11 above), seeking a perpetual injunction by way of a restraint on the

Company from selling its investments in MCF till ZACL recovers its dues. The Hon.

City Civil Court, vide an ex-parte order dated 20.12.18, issued a temporary injunction as

sought by ZACL. This order was appealed against by the Company in the Hon. High

Court of Kamataka, which vide an order dated 28.1.19 granted a stay on the order dated

20.12.18. Thereafter, ZACL approached the Hon’ble Supreme Court (vide a SLP) against

the High Court order dated 28.1.19. Vide an order dated 20.2.19 the Hon’ble Supreme

Court remitted the matter back to the City Civil Court to decide on the maintainability of

the suit. The Company also gave an undertaking for not selling any further shares held in

MCF. On 16.3.19, the City Civil Court dismissed the suit filed by ZACL which appealed

against it in the Karnataka High Court. On 18.3.19, the Court granted an interim stay

restraining the Company from selling any further MCF shares and reserved its order..

With a View to reach an amicable settlement for the litigations as referred herein and in

note no. 11, the company initiated a settlement process and has executed a Letter of Intent

dated 2.5.19 with ZACL.

13.

14.

15.

16.

17.

18.

19.

20.

The NCLT, Mumbai on 5th December, 2017 had passed an order for Liquidation of a

Promotee Company being UB Engineering Limited, in which the Company also holds

4,52,243 equity shares. In view of the liquidation, the investments in this Promotee

Company has been written off in this Financial Year.

On 3rd May 2018, the Deputy Director, Enforcement Directorate, Mumbai had

transferred a total of 22,00,360 shares in the Company, held by three Promoters, to their

demat account from the respective Promoters demat accounts. Thereafter, a total of

25,17,189 shares (which includes the above 22,00,160 shares) in the Company held by

two Promoters (included in three above) has also been attached by an order of attachment

of shares by the Recovery Officer, Debt Recovery Tribunal, Bangalore on 2151 June 2018.

The Company has received a Show Cause Notice dated 3rd July 2018 under the Fugitive

Economic Offenders Act 2018 (FEOA) whereby the Company’s investments in United

Breweries Ltd. and United Breweries (Holdings) Ltd are alleged to be confiscated. The

Company has filed its objections in the designated court for FEOA, Mumbai. The matter

is now posted for hearing on 1St July 2019.

The Company’s net worth taking into account the market value of its investments, would

be more than adequate to meet all its liabilities and to continue to operate in the future.

Accordingly, the Company continues to present its financial statements on the principles

applicable to ‘going concern’.

The Company is operating in a single segment.

The Company does not have a Managing Director. The affairs of the Company in the

interregnum are being managed, under the guidance of the Board of Directors.

Previous year / periods figures have been regrouped wherever necessary.

The qualifications in the Audit Report of the Statutory Auditor are answered in the Note

Nos. 16 and 3 above.

21.The financial results and notes are also available on the websites of the Stocks

Exchanges, viz, www.bseindia.com and wwwnseindialcom and also on the website of the

Company Viz, www.mcdowellholdingspo.in

By Authority

Wei)!Chairman ‘2

Place: Bangalore

Date : May 9, 2019

McDowell Holdings Limited

Rego. Office: US Tower, Level 12, U8 City, 24 Vittal Maiiya Road, Bangaiore, 560 001

Email: nihiinvestor©ubmaitcom | website: www.mcdoweliholdingstan [ CIN : L05190KA2004PLCO33485

ANNEXURE - I

Amounts in Rs. Lakhs

Statement on Impact of Audit Qualification for the Year Ended March 31, 2019

[see Regulation 33/52 of the SEBI (LODR) (Amendment) Regulations, 2016]

Audited Figures Adjusted Figures

1. S|.No Particulars(as reported before Adjustment for Audit (audited figures after

ad] sting for Qualifications adJus rig for

qualifications) qualifications)

1 Turnover/Total Income 157118 - 157.18

2 Total Expenditure 823.27 , 823.27

3 Exceptional item 971.75 - 971.75

4 Net Profit/ (Loss) 305,66 , 305.66

5 Earnings Per Share —

a. Basic/ Diluted earning per share (before exceptional item) (4.76) -

(4.76)

b. Basic/ Diluted earning per share (after exceptional item) 2.15 — 2.18

Total Assets 3,795~

3,795

Total Liabilities 2,570 —

2,570

8 Net Worth 1,224 -

1,224

9Any other financial item(s)

(as felt appropriate by the management)

[1. Audit Qualification (each audit qualification separately):

a. Details of Audit Qualification:

i. The Company’s income streams are not sufficient to meet its recurring financial obligations. The Company has defaulted in repaying the inter—

corporate deposits taken by it. These factors have adversely affected the going concern assumptions used in the preparation of financial

statements.

ii. United Breweries (Holdings) Limited, (UBHL) in which the company holds 52,60,002 shares with a carrying value of 10.49 crores has been

ordered to be wound up pursuant to an order dated 07-02-2017 of the Honourable High Court of Karnataka. The decline, other than temporary,in the value of such investments as a result of this development has not been quantified and provided for in the accounts.

Type of Audit Qualification : All are Qualified Opinion

Frequency of qualification :

1. Point a (i)-

Repetitive since FY 2013—14

2. Point a (ii)~

Repetitive since FY 2016-17

For Audit Qualification(s) where the Impact is quantified by the auditor, Management's views: NOT APPLICABLE

For Audit Qualification(s) where the Impact is not quantified by the auditor: ,

(i) Management‘s estimation on the Impact of audit qualification:

(ii) If management is unable to estimate the Impact, reasons for the same:

For Qualification 3 (ii) above : The Company is in the process of evaluating the impact of the winding up order pending the

outcome of the appeal filed by UBHL.

(iii) Auditors' Comments on (i) or (ii) above:

Impact on financials could not be ascertained at this stage of winding up process of UBHL pening the outcome of the appeal.

III.| signatories:

For B V C 8: Co.,Chartered Accountants

Firm Registra'

MmeStatutory Au i or: Audit Committee Chairman : Director :

Vishwas Shetty T M S Kapur Nitin Kochhar Tushita Patel

Partner, B V C & Co.

Membership No. 218619 DIN : 00703815 DIN: 03559734 DIN: 07017591

Place: BengaluruDate : May 9, 2019